IMPACT OF FOREIGN CONTRACTORS ON

DEVELOPMENT OF SRI- LANKAN CONSTRUCTION

INDUSTRY

THROUGH TECHNOLOGY TRANSFER

D. M. L. S. Bandara

(09/8852)

Degree of Master of Science

Department of Civil Engineering

University of Moratuwa

Sri Lanka

February 2014

IMPACT OF FOREIGN CONTRACTORS ON

DEVELOPMENT OF SRI- LANKAN CONSTRUCTION

INDUSTRY

THROUGH TECHNOLOGY TRANSFER

D. M. L. S. Bandara

(09/8852)

Dissertation submitted in partial fulfillment of the requirements for the degree of

Master of Science

Department of Civil Engineering

University of Moratuwa

Sri Lanka

February 2014

DECLARATION

“I declare that this is my own work and this dissertation does not incorporate without

acknowledgement any material previously submitted for a Degree of Diploma in any other

University or institute of higher learning and to the best of my knowledge and belief it does

not contain any material previously published or written by another person except where the

acknowledgement is made in the text.

Also, I hereby grant the University of Moratuwa the non-exclusive right to reproduce and

distribute my dissertation, in whole or in part in print, electronic or other medium. I retain

the right to use this content in whole or part in future work (such as articles or books).

…………………………… ………………………………

Signature: Date:

The above candidate has carried out research for the Master Dissertation under my

supervision.

……………………………… ………………………………

Signature of the supervisor: Date:

i

DEDICATION

This dissertation is dedicated to my beloved parents, mother in law, my charming wife

Mahesha, and my three kids Thenuka, Menuka and Vihansa, who have always been with

me, in every hurdle I encountered.

ii

ACKNOWLEDGEMENT

My initial gratitude is extended to my supervisor Dr .L. L. Ekanayake, Senior Lecturer

University of Moratuwa for agreeing to be my Supervisor and providing all necessary

guidance throughout the course of this Dissertation.

My sincere thanks, in particularly go to Professor A. A. D. J. Perera, who the Head of the

Construction Management Division University of Moratuwa and Dr. R.U. Halwathura

Senior Lecturer Department of Civil Engineering University of Moratuwa.

A number of other people have kindly contributed to this research. Especially in the

construction industry, senior managers and their officers who were spent their valuable

time for accepting my questionnaire paper and answering it. I send my sincere thanks all of

them.

I do not forget my office staff, especially Management Assistant Miss. B.V. Heshika and

Miss. D.T. Hapuhanthiri, I must say thanks all of them also.

Finally, I would like to express my deep appreciation for the support received from Course

Administrator Mrs. Gihani Goonasekara and Technical Officer Mrs. M. M .Kanthi Menike,

of the Construction Management Division, University of Moratuwa.

Sarath Bandara Dissanayaka

February 2014

iii

ABSTRACT

Technology Transfer has been a subject of considerable interest to many groups, because of

the close relationship between technology transfer and economic growth. It has aroused the

interest of academic researchers.

Discussions on technology transfer (TT) in construction in the past have mainly focused on

technology acquisition during the execution of projects involving an overseas party. The

discussions enclosed how effectively the projects were executed and any benefits that

accrued to the contracting partners from the foreign contractors.

This paper attempts to extend this discussion to the problems and prospects of International

Technology Transfer within the domestic construction sector in order to boost domestic

capacity.

A comprehensive literature survey was conducted to highlight past and present situation of

the construction industry, in Sri Lanka. Questionnaire was primarily prepared in the firm of

interviewing parties related to the construction industry, by visiting the advisory services

and Industry Development division at ICTAD, and interviews with senior officials at

ICTAD registration rank C1, C2 and C3 contractors within the Colombo District.

The development of a construction industry of a certain country can be enhanced through

the involvement of foreign construction firms. However, authors’ initial investigations

raised question is, whether the Sri Lankan construction industry is ready to acquire the

possible construction technology through foreign firms. This paper identified enablers and

barriers of technology transfer and suggested local construction industry to create a suitable

condition to acquire construction technology more dynamicaly through foreign firms.

Keywords: Technology Transfer, Contractor, Construction Industry

iv

TABLE OF CONTENT

DECLARATION i

DEDICATION ii

ACKNOWLEDGEMENT iii

ABSTRACT iv

TABLE OF CONTENTS v

LIST OF FIGURES viii

LIST OF TABLES ix

CHAPTER 01 – INTRODUCTION

1.1 General 1

1.2 Objectives 6

1.3Methodology 6

1.4 Structure of the Report

8

CHAPTER 02 – LITERATURE REVIEW

2.1 Introduction 9

2.2 Technology Transfer 10

2.3 Technology Transfer as Enhancement of Capabilities 11

2.4 Technology capabilities & assessment 11

v

TABLE OF CONTENT

2.5 Technology components 13

2.6 Important Factors in International Technology Transfer 14

2.7 Brief History of Technology Development of Sri – Lanka 15

2.8 The role of the technology transfer in innovation within the construction

industry 18

2.9 Factors influencing the development of the Sri Lankan construction 19

industry

2.10 Government Incentives 20

2.11 Foreign Contractor’s Involvement 21

2.12 Foreign Contractors Entry Modes 23

2.12.1 Foreign Direct Investment (FDI) 23

2.12.2 Joint Venture, Partners 23

2.12.3 Sub Contractor 23

2.13 Impact of Foreign Contractors 24 24

2.14 The Role of the Technology Consultant 26

2.15 Impact of Globalization 28

2.16 Summary of the Key Issues in Technology Transfer 30 30

vi

TABLE OF CONTENT

CHAPTER 03 – METHODOLOGY OF STUDY

3.1 Introduction 31

3.2 Data Collection Method 31

3.2 Questionnaire Survey 32

3.4 Method of Data Analysis 33

CHAPTER 04 - ANALYSIS OF DATA AND DISCUSSION OF RESULTS

4.1 Introduction 34

4.2 Specimen calculation for Relative Impotent Index (RII) 34

4.3 Analysis of data and discussion of results 35

CHAPTER 05 - CONCLUSION AND RECOMMENDATIONS

5.1conclusion 54

5.2 Recommendations 56

REFERENCE 58

APPENDIX 1

Questionnaire 61

vii

LIST OF FIGURES

Page No.

Figure 1: Construction industry growth 16

Figure 2: Graphical depicting for query E-1 35

Figure 3: Graphical depicting for query E-2 37

Figure 4: Graphical depicting for query E-3 39

Figure 5: Graphical depicting for query E-4 41

Figure 6: Graphical depicting for query E-5 43

Figure 7: Graphical depicting for query E-6 45

Figure 8: Graphical depicting for query E-7 47

Figure 9: Graphical depicting for query E-8 49

Figure 10: Graphical depicting for query E-9 50

Figure 11: Graphical depicting for query E-10 52

VIII

LIST OF TABLES

Page No.

Table 1: Involvement of Foreign Contractors in the Sir Lankan

Construction Industry 25

Table 2: Advantages and Disadvantages of Globalization Considering

Construction Industries in Developing Countries 29

Table 3: Relative Important Index for Query – E1 35

Table 4: Relative Important Index for Query – E2 37

Table 5: Relative Important Index for Query – E3 38

Table 6: Relative Important Index for Query – E4 40

Table 7: Relative Important Index for Query – E5 42

Table 8: Relative Important Index for Query – E6 44

Table 9: Relative Important Index for Query – E7 46

Table 10: Relative Important Index for Query – E8 49

Table 11: Relative Important Index for Query – E9 50

Table 12: Relative Important Index for Query – E10 51

ix